The Committee shall be comprised of three (3) members of the Board
of Trustees. Committee members shall be nominated by the Chairman and selected
from eligible Trustees by vote of the Trustees.

(2) Term

Committee members shall serve for a period of four years subject to their term
of office under Section 1003 of the Public Authorities Law. Committee members
may be reelected to serve for additional periods of four years subject to their
term of office. A Committee member may resign his or her position on the
Committee while continuing to serve as a Trustee. In the event of a vacancy on
the Committee due to death, resignation or otherwise, a successor shall be
selected in the manner and for the period described above.

(3)
Removal

Committee members may be removed only if they are removed as Trustees for cause,
subject to Section 2827 of the Public Authorities Law.

(4)
Meetings and Quorum

The Committee shall meet at regularly scheduled meetings at least three times
per year. One Committee member may call a special meeting of the Committee if
requested to do so by the Authority’s President and Chief Executive Officer, the
General Counsel, the Inspector General/ Director of Security, the Chief
Financial Officer, the Controller or the head of Internal Audit.

One Committee member at a regular or special meeting of the Committee shall
constitute a quorum for the purposes of conducting the business of the Committee
and receiving reports.

Any meeting of the
Committee may be conducted by video conferencing.

To the extent permitted by law, the Committee may hold meetings or
portions of meetings in executive session.

B. FUNCTIONS AND
POWERS

(1)
General Powers

The Committee may call upon the resources of the Authority to assist the
Committee in the discharge of its oversight functions. Such assistance may
include the assignment of Authority employees to assist the Committee, and the
retention of external advisors subject to Section 2879 of the Public Authorities
Law and the Authority’s Expenditure Authorization Procedures.

The Committee may direct any Authority employee to make oral or written reports
to the Committee on issues and items within the Committee’s purview. The
Committee may direct the Authority’s internal auditors to conduct special audits
of items and issues of concern to the Committee.

(2)
Relationship to the Independent Accountants

The Committee shall seek to enhance of the integrity, quality, reliability,
thoroughness and fairness of the Authority’s financial statements and
accompanying notes, and shall oversee the relationship with the Authority’s
independent accountants. To effect this objective, the Committee shall advise
the Trustees in the selection and discharge of the independent
accountants and shall meet at least twice a year with such independent
accountants to discuss the independent accountants’ work plans, objectives,
opinion, and recommendations. Individual Committee members may have additional
meetings with the independent accountants.

The Committee shall annually review the scope, objectives and results of the
independent accountants’ examination of the annual financial statement and
accompanying notes, and shall report its findings to the Trustees. The
Committee may at any time report on and make recommendations to the Trustees on
any matter in connection with the independent accountant’s audit process.

(3)Relationship to Internal Audit and Controller

The Committee shall appoint the Director of Internal Audit and Corporate
Compliance, establish his compensation and benefits and make recommendations
concerning the staffing of Internal Audit and related functions.

The Committee shall have oversight of the Office of Internal Audit, its
resources and activities so that Internal Audit is directed toward those
activities and processes where the potential benefit to improving internal
controls is the greatest. The Committee shall promote coordination between the
internal auditors and independent accountants so that all material areas of
activities are adequately covered.

The Committee shall meet at least three times a year with the Authority’s
Director of Internal Audit and Corporate Compliance and the Controller, and may
direct the aforementioned individuals to attend any meeting of the Committee,
and to prepare and deliver such reports as requested.

The Committee shall report at least annually to the Trustees as to its findings
concerning the internal audit function, and may make recommendations at any time
as it deems appropriate.

(4)
Relationship to Inspector General/Director of Security

The Committee shall have oversight of issues relating to compliance with the
Authority’s policies and procedures arising through complaints to or
investigations of the Office of Inspector General. The Inspector
General/Director of Security shall report to the Committee at least three times
a year as to complaints received by the Authority relating to corruption,
fraud, criminal activity, waste or abuse and as to any reports received from the
Office of the State Inspector General. The Committee shall establish procedures
for the receipt, retention, investigation and referral of such complaints and to
ensure that all Authority employees report promptly to the Office of Inspector
General any information concerning allegations of corruption, fraud, criminal
activity, waste or abuse.

The Committee may direct the Inspector General/Director of Security to prepare
and deliver reports to the Committee and to meet with the Committee regarding
compliance issues.